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China Readings for January 4th

"Sinocism is the Presidential Daily Brief for China hands"- Evan Osnos, New Yorker Correspondent and National Book Award Winner

Malcolm Gladwell Test Has Japan Look to China: William Pesek – Bloomberg – If you want to silence a room filled with Japanese politicians, suggest they should learn from China (CNGDPYOY).
The conventional wisdom favors the flip side of this dynamic: China should be studying Japan’s playbook. Japan, after all, is an example of both what China needs to do (create a vibrant domestic economy and high living standards) and what it mustn’t (slide into bad-loan crises and deflation).

The hope is that this will allow a painless change of gear for the economy.

Then, if you combine the compressed valuations coming off last year’s dismal equity performance with a looser monetary policy (and no world-ending implosion), this points to more favorable conditions for equity markets.

This narrative might sound plausible from a macro perspective, but on the ground, other worries are still troubling investors

Is Huawei a Paper Tiger? – China Private Equity | China Private Equity – Not much is known about the secretive company. But for all its size and prominence in the telecommunications industry, Huawei’s corporate finances and balance sheet may be a good deal weaker than commonly assumed. The problem comes from Huawei’s unbalanced balance sheet, and an over-reliance on loans from Chinese state-owned banks, rather than payments from customers, to finance its business. In 2011, instead of too much help from the Chinese government, Huawei seems to have suffered from a lack of it.

Hu: Hostile forces seek to westernize, split China – Yahoo! News – Chinese President Hu Jintao has told Communist Party members that hostile forces abroad are trying to westernize and divide the country with their cultural influence and that officials must remain vigilant against such efforts.
The party magazine Seeking Truth this week published an excerpt of a speech by Hu to party leaders in October in which he said China is facing a difficult ideological struggle.
"We must clearly see that international hostile forces are intensifying the strategic plot of westernizing and dividing China, and ideological and cultural fields are the focal areas of their long-term infiltration," Hu said.
Hu did not specify who the hostile forces are, but Chinese leaders have tried to bolster their legitimacy with a more demanding public by depicting China as being engaged in an ideological and cultural war with the West.

Taiwan president race darkened by spying charges – Taiwan's presidential campaign has taken a dark turn, with the opposition challenger accusing intelligence services under the control of incumbent President Ma Ying-jeou of tracking her campaign events for political advantage.

The West is using cultural means to divide China (PRCH), which needs to be alert to this threat, President Hu Jintao said in a Communist Party magazine.
“International forces are trying to Westernize and divide us by using ideology and culture,” Hu wrote in an article in Qiushi. “We need to realize this and be alert to this danger.”
Many countries, especially Western powers, are attempting to expand their influence through cultural hegemony, and China must deepen and promote its own values of “socialism with Chinese characteristics,” Hu wrote in the article, which was published on the government’s website on Jan 1. China needs to strengthen its cultural values as it faces possible challenges from the West, he said.

China Set to Punish Another Human Rights Activist – NYTimes.com – BEIJING — First the police crippled Ni Yulan’s legs. Then the authorities took away her license to practice law. Later, while she was serving time in jail, demolition crews tore down the courtyard house that had been in her family for two generations.

Freed from prison in 2010 but unable to walk, she ended up living in a Beijing park with her husband for nearly two months, until unflattering publicity led local officials to move them into a cheap hotel.

Bird flu virus doesn’t jump between humans: China | Reuters – "The virus found in the patient was 90 percent similar to H5N1 viruses previously isolated in ducks in China, which suggested that the man was very likely to have been infected through direct contact with a bird," the Shenzhen Center for Disease Prevention and Control said in a statement

Suspect detained following billionaire CEO’s death by poisoned cat | Nanfang Insider – Police in Yangjiang announced yesterday, writes Southern Metropolis Daily (SMD), that a suspect has been detained in connection with the death last month of billionaire CEO and Guangdong provincial people’s congress delegate, Long Liyuan.
The case attracted attention because Long’s death occurred immediately after he and two associates dropped into a well-known local restaurant for some cat hotpot on December 23.

While the Departments of State and Treasury have held important functional roles in conducting the China-US Strategic and Economic Dialogue meetings, raising the bilateral status of US-China relations with ongoing meetings between two senior US Executive Branch officials with two of China's most senior leaders, Vice Premier Li Keqiang and State Councillor Dai Bingguo, there has been a general sense that neither Timothy Geithner nor Hillary Clinton and her team were comprehensively driving US-China policy.